Selling a deceased estate may seem quite daunting to a grieving family, but with the help of an executor and personal legal representative, along with a trustworthy real estate agent, this process need not be overly complicated.

What is a deceased estate?

When we talk about a deceased estate, we are referring to the estate of a person that has recently passed away. Their estate includes all their property, including the home that they own.

The deceased estate comes into existence when the person dies, and this estate is then to be distributed among the deceased person’s relatives and loved ones as the deceased expresses in their last will and testament.

If the person owned a house, this property will form a part of their estate, and may be sold or passed on to someone else as an inheritance. Should the executor of a deceased estate opt to sell the property in accordance with the deceased’s wishes, the funds made through the sale of the property should then be distributed to the beneficiaries of the will.

What is an executor and how do you appoint one?

The executor of a will is the person that the deceased has chosen to administer their will and distribute their estate according to their wishes. This person may be a family member or friend, but can also be a legal representative who is not related to or befriended with the deceased.

While anyone over the age of 18 may be appointed as the executor of a will, this role can prove quite demanding and time-consuming, especially if the will is contested. In this regard, the services of an independent executor, like a solicitor, are sometimes enlisted. Of course, this means that the lawyer will be paid – something that some people avoid by appointing someone they know as the executor of their estate. The benefits of using an independent executor are many, but the chief advantage of using a solicitor, for example, is that they are an impartial professionals that can handle the significant paperwork and effort of organising the deceased’s estate.

The executor of an estate is tasked with a great many things: they have to apply for the death certificate, apply for a grant of probate to validate the will of the deceased, and may also be involved in the funeral arrangements. They need to inform all relevant parties, including banks, government departments and the Australian Taxation Office of the testator’s death. The executor is responsible for settling all financial matters of the deceased, and in the event that a will is contested, they will have to resolve the disputes between beneficiaries.

The executor of an estate is nominated in a person’s will, and it is customary that the proposed executor of a will is asked if they are able and willing before they are appointed.

What is a grant of probate?

Also known as the grant of representation, the grant of probate is a key document when settling the estate of someone that is deceased. Applying for the grant of probate is one of the most prominent tasks of the executor of an estate, as this document not only certifies the will of the deceased as valid, but also confirms the executor’s appointment and gives the executor legal permission to administer the deceased estate and distribute it to the beneficiaries stipulated in the will.

When a property forms a part of the deceased estate, ownership of the home cannot be legally transferred until the grant of probate has been received, although the contract of sale may be entered into, subject to a grant of probate.

Getting a grant of probate takes approximately four weeks, although the time may vary from state to state and city to city. Once the grant of probate has been received, the executor of a will becomes the seller of the property, and will serve as such until the sale of the home has been completed. Once the sale of the house has been completed, the executor will distribute funds acquired through the sale of the property to the beneficiaries of the will.

What is a grant of letters of administration?

As mentioned earlier, a grant of probate also serves to validate the will of the deceased. However, deceased estates sometimes need to be settled without a last will and testament in place. How exactly the estate of someone who died without a will is distributed varies from state to state, and it is important to acquaint oneself with the laws that are applicable where you live. Online guidelines are available for Queensland, New South Wales, the Northern Territory, the Australian Capital Territory, Victoria, South Australia, Western Australia and Tasmania.

Should a will not be in place or the will left not be valid, an application for a grant of letters of administration will need to be brought by the next of kin of the person who has passed away, or by their legal representative. The grant for letters of administration will give the person applying permission to distribute their estate according to regulations that are in effect in their state.

How Are Deceased Estates Taxed?

According to the Australian Taxation Office, the executor of a deceased’s will or their legal personal representative will deal with their tax affairs after getting the grant of probate or grant of letters of administration. Once the executor has notified the ATO of the death, they will be responsible for lodging the deceased estate tax returns.

As the executor also has to make sure that the overall value of the deceased estate is maximised, they have to apply to the superfund that any remaining accounts that aren’t subject to a binding death benefit nomination are paid into the estate.

Deceased estate are taxed according to the period of time after a person’s death: for the first three income years following a person’s death, the deceased estate income is taxed at individual income tax rates with the benefit of the full tax-free threshold, but without tax offsets. If the estate is still being administered in the fourth income year and later, different tax rates will apply.

What is the process of selling a deceased estate once you find a real estate agent?

Selling a home that is part of a deceased estate isn’t all that different from selling while the owner is still living. As soon as the grant of probate has been received, the executor or legal personal representative may begin to get the property ready for the market.

As the legal seller of the property, the executor or LPR should find a reputable real estate agent to help them sell the property. Real estate agents provide a range of services to sellers of deceased estates, including fairly and realistically valuing the property and advising legal personal representatives or executors about repairs and renovations that will add value to the property and make it appealing to the broadest possible group of potential buyers.

Furthermore, the real estate agent will also be responsible for all the paperwork associated with the sale of the home, as well as for its overall marketing strategy. Real estate agents also handle all negotiations on behalf of the seller. Executors or personal legal representatives may opt to sell the home in the traditional manner, but may also decide to sell it via auction, as this process ensures that beneficiaries are aware of all negotiations as they happen.

Considerations when selling a deceased estate

It is important to remember a number of factors when selling property that forms a part of a deceased estate. A final tax return will need to be filed for the deceased by the executor, and depending on the size of the deceased estate and the terms stipulated in the will, this will need to be done for the period from the start of the financial year to the date of death, although more returns may have to be completed if the will is complicated or if testamentary trusts are in place.

Conclusion

Settling the estate of someone who has passed away starts with the executor or legal personal representative applying for a grant of probate or a grant of letters of administration. Once the will has been found valid, the LPR or executor will become the vendor of the property they own, and will be responsible for distributing the funds garnered from the sale of the property to the beneficiaries, as laid out in the deceased’s will.

With the help of a qualified and experienced real estate agent, selling a deceased property can be handled in a jiffy, going a long way in completing the administration associated with someone’s death, and fulfilling their very last wishes.

Still haven’t found an agent to help you settle a deceased estate? Perfect Agent recommends a number of reputable real estate agents according to your exact needs. Contact Perfect Agent today to find an agent you can trust.